Consumer behavior and marketing strategy

IntroductionEuropean and international perspective

Doc. Dr. Ing. Elena Horská, Department of Marketing FEM SUA in Nitra

Theory of consumer behaviour

• The field of consumer behavior covers a lot of ground:

• it is the study of the processes involved when individuals or groups select, purchase, use or dispose of products, services, ideas or exeriences to satisfy needs and desires.

• Consumer behavior is the dynamic interaction of affect and congition, behavior and the environment by which human beings conduct the exchange aspects of their lives.

Consumer behavior as a field of study

Consumer behavior is a very new field and, as it grows, it is being influenced by many different by many different perspectives.perspectives.

The pyramid of consumer behavior theory:

Micro consumer behavior (individual focus)

Macro consumer behavior (social focus)

Interdisciplinary research issues in consumer behavior I.

• Experimental psychology: product role in perception, learning and memory processes (which part of magazine are most likely to be read)

• Clinical psychology: product role in psychological adjustment (do thin models make the average woman feel overweight?)

• Microeconomics: product role in allocation of individual or family resources (factors influencing the amount of money spent on magazines in a household)

• Social psychology: product role in the behaviors of individuals as members of social group (ways that ads in a magazie affet readers´attitudes towards the product)

• Sociology: product role in social institutions and group relationships (patterns by which magazine preferences spread through a social group)

Interdisciplinary research issues in consumer behavior II.

• Macroeconomics: product role in consumers´relations with the marketplace (effects of the price of fashion magazines and expense of items advertised during periods of high unemployment)

• Literary Criticism: product role in the verbal and visual communication of meaning (ways in which underlying messages communicated by models and ads in a magazine are interpreted)

• Demography: product role in the measurable characteristics of a population (effects of age, income and marital status of a magazine´s readers)

• History: product role in societal changes over time (ways in which our culture has changed over time)

• Cultural Anthropology: product role in a society´s beliefs and practices (e.g. readers´definition of masculine vs. Feminine behaviour)

Literature and futher studies (some suggestions)

• Solomon: Consumer behaviour• Kanuk: Consumer behaviour• Peter – Olson: Consumer behaviour and

marketing strategy• Kulcakova – Richterova: Spotrebiteľ na trhu• Horská, Nagyová, et al: Európsky spotrebiteľ a

spotrebiteľské správanie (in printing)

Consumer´s versus marketer´s perspective

• Pre-purchase issues: – How does a consumer decide that he/she needs a

product?

• Purchase issues– How do situational factors such as time pressure or

store displays, affect the consumer´s pruchase decision?

• Post-purchase issues– What determines whether a consumer will be satisfied

with a product and whether he/she will buy it again?

Three elements for Consumer Analysis

Consumer affect and cognition(thinking, belief,

feelings, understanding stimuli)

Consumer behavior(where to go, what to buy,

how to pay)

Consumer Environment

(social stimuli, culture, Subculture, physical stimuli, ad)

Practical implications of consumer studies

• Understanding consumption and its meanings

• Explain consumer decison making and behavior

• Predict consumer choice and behavior

Consumer behavior: people in the marketplace

• Global marketplace .... Same people, same approach, standardization....

• Regional marketplace .... Where is it?

• Local marketplace .... Differences among people

• European marketplace .... How is European consumer?

... Considerations on globalization

from business sphere

„...Strategies and sources are solved at global level in our company, .... We produce regionally and sell locally. ... We

support our brand and take care of local customer preferencies...“

(Herbert Baum, exprezident Campbell´s soup)

„ ... Consideration on globalization and regionalization point at fact that company Nestle looks for balance between the global

strategy and local conditions...“(Peter Brabech – Lemathe, Nestle)

Think global, act local...

• In the 1970s the argument was framed as „standardization vs. adaptation.“

• In the 1980s it was „globalization vs. localization.“• In the 1990s it was „global integration versus local

responsibilities.“

• In the twenty-first century, standardization versus adaptation is simply not the right question to ask. Rather, the crucial question facing international marketers is what are the most efficient ways to segment markets.

Adaptation

• Adapting the offer to the local requirements and consumer needs:– Product– Price– Place– Promotion

Standardization

• Standardizated products for global markets and global customers which are the same in all the world (a world is one global village):– Product– Price– Place– Promotion

Global products are related to:

• Health, fitness, wellness

• Convinience products

• Enjoyment marketing, experiences, having fun in consumption

• Country-of-origin/regional specialities

• Higher levels of Maslow hierarchy of needs

• Extra value added

On the middle of the road: from adaptation towards standardization

On the middle of the road: from adaptation towards

standardization ????

• Mc´Donalisation• Coca-Colonization• Americanization: U.S.

cultural imperialism

On the middle of the road: from adaptation towards standardization

• look for differences and uses the principle of adaptation to meet requirements of local customers

• look for similarities and tries to find the effective model satisfying the majority of customers

G-localization

• Combination of standardization and localization in terms:– to behave as the home firm– to accept the local patriotism– to change the local consumer behaviour

continuously, no rapidly– consumers to perceive the market changes

as the natural development, no aggressive marketing.

G-localization ... because of respecting ...

• Focus on market responsibilities:– Cultural differences– Regionalism: is the grouping of countries into

regional clusters based on geographical location

– Deglobalization: moving away from the globalization trends and regarding each market as special, with its own economy, culture and region

European consumer

How should we define an European consumer?

Which approach to use?– National?– Regional?– Global European one?

• Do we know something about our European neighbours?

According to research associated with VanderMerwe and L´Huillier (1989), companies in Europe can compete effectively in Europe by accurately targeting customers close to one another, but not necessary living in the same country.

The six clusters identified by VanderMerwe and L´Huillier (1989) are:• the UK and Ireland,• Central and Northern France, Southern Belgium, Central Germany and

Luxembourg,• Spain and Portugal,• Southern Germany, Northern Italy, Southeastern France and Austria,• South Italy and Greece,• Northern Germany, the Netherlands, Northern Belgium, Iceland, Norway,

Finland and Denmark. These studies did not consider countries of the Central and Eastern Europe. In

present time they play an important role in processes of the European economic integration and present challenges for Western companies entering their markets.

Based on the common features of historic background, geographical location, culture and consumer habits we can distinguish between Central European cluster, South – East European cluster and Baltic States. Of course, there are still certain internal differences within such roughly defined clusters.

European Marketing and Consumer Approach

Global approach

Local approach

Regional approach

Who is a target customer?

What is a plan for territorial expansion?